British Prime Minister Boris Johnson said over the weekend that the government would end direct support for the fossil fuel sector abroad.
In what the Prime Minister’s Office has said is a major policy shift, the UK will end taxpayer support for overseas fossil fuel projects “as soon as possible, as the government strives to support the sector’s transition to low-carbon energy “.
The policy will see the UK end export finance, aid finance and trade promotion for new crude oil, natural gas or thermal coal projects, “with very limited exceptions.”
Over the past four years, the government has supported £ 21 billion in oil and gas exports to the UK through trade promotion and export finance. The policy will be implemented after a short consultation period and is expected to go into effect as soon as possible, and before COP26 next November, the prime minister’s office said. The consultation is expected to end by February 8, 2021.
The move is expected to speed up the transition to support for green technology and renewable energy, creating jobs across the UK and spurring international growth in the industry, according to the Prime Minister’s Office.
“The government will work with the UK’s oil and gas industry to support the shift to low-carbon energy sources through the North Sea Transition Agreement, ensuring that areas like Teesside and Aberdeen can become global hubs for wind power, carbon capture and other clean technologies of the future, ”the statement said.
Prime Minister Boris Johnson said: “Climate change is one of the great global challenges of our time, and it is already costing lives and livelihoods around the world. Our actions as leaders must be driven not by shyness or prudence, but by ambition on a truly large scale. “
“That’s why the UK recently led the way with a bold new commitment to cut emissions by at least 68% by 2030, and that’s why I’m happy to say today that the UK will end taxpayer support for overseas fossil fuel projects as soon as By taking bold and decisive action today we will create the jobs of tomorrow, drive the recovery.
UK Export Finance (UKEF) will continue to review requests for support in the oil and gas sector during the consultation period.
The British Chancellor allocated £ 2 billion to the UKEF’s direct lending facility in the spring budget to accelerate her support for clean growth and renewable energy projects, meaning she can now provide direct loans dedicated to foreign buyers of UK renewable goods or services.
Fight against emissions at home and abroad
Deirdre Michie, CEO of Oil and Gas UK (OGUK), the representative body of the UK offshore oil and gas industry, said:
“The UK is playing a global leadership role in how to tackle emissions at home, and we recognize that we should be doing the same abroad. Our industry and its world-class supply chain, built on decades of pioneering work in the North Sea, have a key role to play in the implementation of the Prime Minister’s ten-point plan.
“We are also in advanced discussions with the government on a North Sea Transition Agreement which can provide a model on how an industry can transform itself in a fair way, creating jobs, boosting the economy and reaching the essential political goal of net zero. emissions. In the years to come, with the support of the government, our local energy supply chain has the potential to benefit enormously from the export of the expertise it develops in carbon capture, in hydrogen and in decarbonization operations.
“We must ensure that we maintain the competitiveness of our supply chain that has accumulated over decades of experience in the North Sea, through a period of rapid change. If we are successful, the UK’s national leadership can reach the whole world, with our industry at the heart of it. However, given the current fragility of our supply chain, all of this must evolve quickly if we are to protect and maintain it as a world class. “